Bankruptcy behavior in the NFL does the overtime

Authors: Kurt W Rotthoff

Publish Date: 2010/07/15

Volume: 36, Issue: 3, Pages: 662-674

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Abstract

Companies in financial distress have an incentive to take on highrisk/highreward projects known as ‘bankruptcy behavior’ This paper investigates the activity of bankruptcy behavior outside of the corporate setting by analyzing the effects of the overtime structure in the NFL relative to College Football In overtime the first team to score in the NFL wins In college football however both teams in overtime get a chance to score and the winner is decided when one team outscores the other This structure causes different strategies for the NFL teams approaching overtime relative to college football teams Using the variance in scoring throughout the game I find evidence that NFL teams take on more risk late in the game to avoid overtime or act as if they have bankruptcy behaviorI would like to thank Robert Tollison Mike Maloney Brian Henderson Patrick McLaughlin Rey Hernandez and Hillary Morgan for the helpful comments Also thanks to those helpful comments from the presentation at the Academy of Economics and Finance meetings Any mistakes are my own

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